Asset prices have soared in value everywhere in the world since October 2002. Prices of stocks, commodities, real estate, art, and every kind of totally useless collectible have shot up. Even bond prices have until recently gone up as interest rates fell.

That all asset classes increased in value simultaneously around the world is most unusual. Previous asset bubbles were concentrated in just one or a few asset classes: In the 19th century, canal and railroad shares; in 1929, US equities; in the late 1970s, conglomerates; in 1980, gold, silver and oil; in 1989, Japan and Taiwan; and in 2000, the telecoms, media and technology sectors. But the beauty today is that every kind of asset is grossly inflated. How could this happen?